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that intention. In a telephone call with Bakutes on June 10,
1992, DeCastro himself conceded that the refunds were intended as
a means of paying his fees.
Although we recognize that the payment of DeCastro’s fees
was an essential element of the Thompsons’ settlement of their
1979-1981 deficiencies, it does not follow that respondent’s
characterization of that settlement (20-percent reduction in
deficiencies plus payment of attorney’s fees) must prevail. From
a practical standpoint, respondent overlooks the fact that the
refunds generated by the reduction in deficiencies exceeded the
legal fees they were intended to defray. More importantly,
inasmuch as the Court of Appeals has taken us to task for twice
failing “to equitably resolve” a situation in which respondent’s
attorneys committed fraud on the court, we believe respondent
should be held to the form of the new settlement. That is, we do
not think it appropriate to define the Thompsons’ settlement of
their 1979-1981 deficiencies only by reference to its asserted
substance, which would require respondent to reduce the proposed
deficiencies of the affected taxpayers by only 20 percent (this
would be the practical effect, because, although respondent would
also be required to reimburse the affected taxpayers for
attorney’s fees, none of the affected taxpayers paid any such
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